3 Reasons Why GCC Governments Are Focusing On Skills Over Credentials

Looking to the future, all GCC countries have stated intentions to diversify their economies away from a reliance on energy industries and build knowledge-based economies. The investment in human capital development is progressive and almost unparalleled globally.

At the 2023 World Government Summit in Dubai, GCC leaders reiterated their intentions to proactively prepare for the digital and green economy driven by innovation and technology with an investment in upskilling and reskilling individuals for the future of work. Addressing this, the 2023 Davos focused on the care and green economy, and the need for interdisciplinary ‘soft’ skills to be at the heart of upskilling, reskilling and new skilling programmes, as well as formal education and the significant global shift from skill development through formal training to skills development led by employers developed through work-based learning.

While the skills challenge is clear, the solutions require both the public and private sector to work together to ensure alignment of policies and programmes that have the desired impact. Education systems globally are having to rethink the role of skills, especially at Higher Education. This has put the value of the traditional university bachelor’s degree in the spotlight with a significant amount of GCC nationals opting for academic higher education routes over vocational or applied learning routes.

The bachelor’s degree is seen as entry into the labour market for most GCC countries. In Etio's (formerly Tribal Education Services) 2022 international student barometer report, 96% of students globally said their study decision-making is driven by the impact of their education on their future career. Despite this, both private sector and public sector employers say there is still a mismatch between what they need and the skills of graduates. This means that traditional credentials need to be reviewed for how they develop skills, not just knowledge.

The importance of bringing the labour market closer to education is well understood in the GCC and many governments are driving initiatives to develop skills both through formal education and in the workplace. Some of these initiatives include developing better labour market intelligence to inform the skills agenda, a focus on developing transdisciplinary skills through formal education, establishing employer led skills standards to support the development of qualifications, mandatory work integrated learning in secondary and higher education and numerous other initiatives.

The following outlines 3 reasons why these, and other initiatives, are so important:

1. Skills Impact Productivity

The link between vocational education systems, with a natural emphasis on ‘doing’ versus ‘knowing’, is well aligned to improved labour market productivity outputs. The International Labour Organisation (ILO) emphasise this as a key focus for economic development. Successful vocational systems, such as those seen in UK and Europe, display why an investment in practical or skills-related elements of education lead to a more productive labour force.

Labour market productivity indicators have been turbulent for most GCC countries with a steady decline over the past two decades. The uniqueness of the labour markets in the region, such as high number of expatriate workers and nationalisation quotas, makes it difficult to accurately compare to other areas of the world and puts to question standard indicators.

An important indicator for the future is Total Factor Productivity (TFP), which measures the qualitative sources of growth to anticipate future labour market productivity. Some qualitative factors include innovation, digital transformation, and skill development. Current data suggests some GCC countries could improve future labour productivity by further focusing policy interventions on these areas (The Conference Board. (2019). Prioritizing Productivity in the Gulf Region).

2. Skills Are The New Currency For Recruitment And Performance Management

Internationally, skills-based hiring has been proven to have better recruitment outcomes over traditional credential-based hiring. Many global technology companies have dropped the requirements for a bachelor’s degree for entry positions and instead want individuals with tangible evidence of skills, regardless of whether they were gained through formal education or not. This has become part of recruitment policies for many technology jobs in global companies such as technology company IBM, Accenture, and others (Fullyer, J. Langer, C. Sigelman, M. (2022). Skill Based Hiring is on the Rise).

In their 2023 workplace learning report, LinkedIn highlight the number one area of focus for learning professionals is to align learning outcomes to business outcomes (LinkedIn Learning. (2023) Work Place Learning Report 2023). This allows employees to build a ‘skills portfolio’ with evidence of how their skill contributed to the business in a quantifiable manner. This changes the nature of performance management systems and how ‘good’ performance is measured. Described as ‘learning in the flow of work’, this links skills development with performance data as a continuous management process (Bersin, J. (2022). HR Predictions 2023).

A critical aspect of skills-based recruitment and performance management is identifying which skills are important to business outcomes and then defining what these skills look like on the job at different levels. Creating this type of skills taxonomy requires skilled learning and development professions and an organisation’s commitment to investing in the skill system that will enable this to occur. Many governments have created mechanisms to support sector-wide approaches to developing skills standards and taxonomies. This is fundamental to the core of quality work-based learning systems such as apprenticeships where explicitly stated skills, along with knowledge and behaviours, are documented with clear description of application to support the writing of credentials that are linked to the workplace. In this system, employer defined credentials are modularised and built over time to form a final qualification.

3. Skills Are The New Focus Of Education 4.0

The World Economic Forum (WEF) coined the term ‘Education 4.0’ as defining a human centric education response to post-Covid education systems. They highlight the importance of including skills such as ‘collaborative problem solving’ as a key part of education across all levels and state that globally potential gains of US$1 billion in GDP from an investment in building collaborative problem-solving skills (WEF. (2022). Catalysing Education 4.0). Education 4.0 also focuses on work-based learning and work-based assessment as part of the broader system, especially at high school and higher education levels. They cite the example of Switzerland where 70% of young people participate in an apprenticeship of some form and 100% of students are exposed to the workplace during their formal education.

At tertiary level, many institutions are including a skills portfolio as part of final credentials to compliment degrees, even at PhD level. These portfolios outline the specific skills students developed throughout their education and evidence of where these skills were assessed in the programme. Another key element of the new world of education is the adopting and integration of technology. With recent discussions on how generative AI will impact education, leadership and professionals need to understand how to integrate and utilise these inventions into formal systems.

Embedding and assessing skills throughout formal education curricula and utilising technology into education requires teachers to be upskilled. The ability to define and embed specific skills into curricula requires teachers to have an understanding of how these skills are used in the labour market in practice. Developing work integrated learning proficiency among educators requires a national approach and supporting mechanisms from teacher training to how schools are reviewed and national quality frameworks. One solution suggested by WEF is to apply skills base hiring practices for teacher recruitment to bring in more people with alternative work experience into the profession and diversifying the teacher talent pool.

What Can The GCC Do Next?

The governments of the GCC have made significant investments in building their human capital with positive outcomes in terms of global human capital rankings and competitiveness. The unique labour market structure and cultural environment of the GCC means it is important to focus on home grown skills policies over replicating policies and programmes from elsewhere. These policies need to focus on shifting mindsets away from the bachelor’s degree being the entry point to the labour market, to a focus on ensuring citizens have the skills needed, and the ability to demonstrate them to prospective employers.

There are a number of active government projects in the region to look at how to better modulise and build a credential-based qualification systems to address the ‘degree over skills mindset’ and allow better access to smaller credentials. Employers in the region are also changing their approach to learning and development with more learning happening in the workplace through formal mentoring programmes and online learning, with less reliance on the one-off learning events that were popular in the past. Human resource professionals are responding with upskilling themselves to prepare for supporting structured work-based learning that is based on standards, such as apprenticeships and take a ‘learning journey’ approach to developing people to address skill gaps.

The integration between skills development through formal education and skills development through the workplace creates an important shift in how governments govern the skills system, as opposed to education and labour systems separately. This shift requires a rapid response from leaders of the GCC to build on the excellent investments already made and ensure citizens are ready to lead the jobs of the future.

Etio has operated in the GCC for over 15 years and supported various governments on human capital development through school reviews/inspections, school improvement, educational leadership development, education and skills policy advice, establishing national skills organisations, designing national skills frameworks and taxonomies, apprenticeships, work integrated learning initiatives, and facilitating employer engagement in education and curriculum and assessment design.